Your search results

The Cost of Housing – Affordability vs Premium?

Posted by Jayson Ang on August 11, 2023

| 0

TLDR

The blog post discusses the challenges Singapore faces in housing affordability, particularly the rising costs of private homes compared to public housing. It examines the impact of wealth transfer between generations on private housing affordability. The government’s measures to support first-time homebuyers and manage investment interests are also highlighted. The need for a delicate balance between affordability and investment interests is emphasized, urging a fresh perspective. Strategic planning and consideration are essential to navigate the evolving landscape of affordable housing in Singapore effectively.

The escalating costs of both public and private housing prompt us to ponder whether homes in Singapore are truly overpriced or if homebuyers have higher expectations beyond basic housing requirements.

Singapore is facing the challenge of housing affordability despite its high homeownership rate and strong economic growth.

Private homes in Singapore have become the most expensive in the region, with a median price of US$1.2 million, and the affordability ratio is not favorable. Singapore also has the highest rental costs in the region.

However, public housing in Singapore is still affordable, earning it the title of “most attainable” in the Asia Pacific Home Attainability Index.

The increasing gap between private and public housing prices may require more grants and subsidies to sustain housing affordability for the masses.

Despite the pandemic and rising geopolitical tensions, housing prices in Singapore have increased significantly, affecting both locals and expatriates.

The high cost of homes in Singapore has raised questions about whether they are truly expensive or if property seekers are looking for more than just basic housing needs.

However, housing affordability is not just about price, but also includes economic opportunity, social aspirations, and social mobility.

The traditional method of measuring affordability using the price-over-income ratio may not provide the full picture. Professors from prestigious universities propose a new concept called the “Superstar City,” which refers to cities with unique characteristics that make them attractive places to live.

Despite the high housing costs in Singapore, it could be argued that it reflects the city’s undeniable charm, resilience, and status as a “Superstar City.”

While attracting foreign talent does contribute to demand, local demand has been the primary driver of price increases.

Data shows that foreign home purchases represent only a small portion of the market annually, while Singaporeans make up the majority of purchases.

The Impact Of Domestic Consumption And Transfer Of Wealth Between Generations

Many Singaporeans are able to afford private housing despite high prices, particularly for new launches.

This is due to the transfer of wealth from older to younger generations, which is often overlooked. The baby boomer generation has accumulated significant wealth from a prosperous property market and economy, and with fewer offspring to inherit this wealth, it presents an interesting dynamic for housing affordability.

The government has implemented measures to support young, first-time homebuyers while attempting to manage the investment interests of mid-to-high income Singaporeans.

However, constraining investment interest in homes may not lead to a correction in prices unless there is a significant contraction in the economy. It may also discourage housing upgrades and wealth transfers, which could leave high-achieving individuals’ aspirations unfulfilled.

Therefore, it is essential to adopt a fresh perspective and focus on supporting those who need it most while considering the complex balancing act between affordability and investment interests.

To maintain Singapore’s competitiveness while providing quality homes for Singaporeans, we must strike a delicate balance.

Before taking any drastic measures, it is essential to carefully consider the potential costs and accurately model the implications. Any mistakes in these calculations could have unintended consequences.

By employing strategic planning and thoughtful consideration, we can effectively navigate the constantly changing landscape of affordable housing in Singapore.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

Mandarin Top 5

Top 5 Tips How to Find Your Dream Home in Singapore: A Step-by-Step Guide

Jayson Ang – October 21, 2024 –

Singapore, a vibrant and dynamic city-state, offers a diverse range of housing options for prospective homebuyers. From condominiums and HDB...

All Buying Tips Opinion

6 Unexpected Property Warning Signs That Can Be Negative for Some, But Beneficial for Others

Jayson Ang – February 29, 2024 –

TLDR When considering property preferences, what may appear as a disadvantage to some buyers could be a unique opportunity for...

All Buying Tips Opinion

Planning for a Future Landed Property Purchase After Selling Your BTO: Investment Tips

Jayson Ang – September 2, 2024 –

TLDR Transitioning from a BTO to a landed property necessitates understanding market trends, meticulous financial planning, exploring financing options, enhancing...

All Blog Posts Buying Tips Opinion Reports

Can You Still Make Money from Older Freehold Condos in Singapore

Jayson Ang – November 23, 2024 –

TLDR While freehold condos might seem like a solid investment, the rise of new developments and aging buildings cast doubt...

Mandarin Top 5

Top 5 Cafes in Singapore for Brunch

Jayson Ang – March 10, 2024 –

Singapore, a melting pot of cultures and flavors, offers an incredible array of culinary experiences to tantalize your taste buds....

Mandarin Top 5

5 Secrets To Successful Property Investing In Singapore

Jayson Ang – March 29, 2024 –

Investing in property is a popular option in Singapore, with many investors seeing it as a lucrative way to build...

Mandarin Top 5

Top 5 Boutique Shopping Streets in Singapore

Jayson Ang – July 22, 2024 –

Singapore, a cosmopolitan city-state known for its vibrant culture and diverse shopping scene, offers a unique blend of modern malls...

Buying Tips Mandarin Top 5

5 Things to Know About Singapore’s Freehold & Leasehold Properties

Jayson Ang – June 10, 2023 –

5 Things to Know About Singapore's Freehold & Leasehold Properties Here are 5 things you need to know about Singapore's...

All Blog Posts Buying Tips

Ready To Make The Jump From HDB To Condo? This Guide Has All The Answers!

Jayson Ang – January 5, 2023 –

TLDR When upgrading from an HDB flat to a condo, consider factors like location proximity, amenities, and regulations. Decide whether...

Mandarin Top 5

5 Cons of Buying a New Development

Jayson Ang – March 4, 2024 –

Luxury properties in Districts 9 and 10 of Singapore are highly coveted, and for good reason. From stunning views and...

Mandarin Top 5

Top 5 : Dangerous Ideas Singapore Property Investors Have

Jayson Ang – February 19, 2025 –

Investing in property, particularly in a thriving market like Singapore, can be an enticing prospect. However, it's not without its...

All Blog Posts Buying Tips

6 Myths About Using Your CPF For Housing

Jayson Ang – February 2, 2023 –

TLDR When it comes to purchasing a house in Singapore using CPF funds, there are several myths that need to...

All Blog Posts Buying Tips

Resale Viewing Do’s and Don’ts: Expert Advice from a Singapore Real Estate Agent

Jayson Ang – December 19, 2022 –

TLDR The blog post provides valuable insights for first-time buyers on navigating the resale property market in Singapore. It covers...

All

Four Things to Avoid When Renting Out an HDB Flat

Jayson Ang – February 23, 2024 –

TLDR Renting out an HDB flat in Singapore can be a lucrative source of secondary income. Key considerations include adhering...

Mandarin Top 5

Top 5 Reasons to Invest in Commercial Property in Singapore – Expert Insights!

Jayson Ang – March 23, 2025 –

Singapore, a thriving business hub in Southeast Asia, offers a robust real estate market with diverse investment opportunities. While residential...

All Buying Tips Opinion

Making Sense of 99-Year Landed Home Investments in Singapore

Jayson Ang – August 25, 2024 –

TLDR Investing in a 99-year leasehold landed property in Singapore can be a lucrative venture due to the country's land...

All Buying Tips

Should Foreign Buyers Be Deterred By the 30% ABSD?

Jayson Ang – December 7, 2022 –

TLDR Foreign buyers interested in private residential properties in Singapore is a common sight due to the country's positive reputation...

Mandarin Top 5

Top 5 : Best Karting Circuits in Singapore

Jayson Ang – December 21, 2024 –

Singapore, a bustling city-state known for its modern architecture, cleanliness, and vibrant culture, is also home to a thriving karting...

Mandarin Top 5

5 Most Common Property Investment Scams To Watch Out For In Singapore

Jayson Ang – June 12, 2024 –

Property investment scams are unfortunately prevalent in Singapore, and unsuspecting investors can fall victim to these scams, leading to significant...